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Iraq Journals

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Friday, March 28

Administration expects Iraq's wealth will help reconstruction

By Brian Tumulty and Sergio Bustos | GNS

WASHINGTON - The Bush administration's expectation that Iraq's massive oil reserves will defray the cost of humanitarian relief and reconstruction received a boost Friday when the U.N. Security Council voted unanimously to restore Iraq's oil for food program.

The 8-year-old program, halted the day before the United States took military action to topple President Saddam Hussein, is expected to play a major role in providing food and medical supplies once the war nears an end.President Bush, speaking to a group of veterans at the White House, said the United Nations action "will bring urgent relief to millions of Iraqis.''

"We care about the human condition of the people who have suffered under Saddam Hussein,'' Bush said.

The oil for food program, which now has an estimated $10 billion to $12 billion in current contracts, is expected to make a big contribution to the rebuilding.

In addition, the United States and other countries have announced a commitment to provide money to help the Iraqi people and rebuild the country.

"Iraq is not Afghanistan,'' Secretary of State Colin Powell told a Senate subcommittee Wednesday. "Iraq has tremendous potential because of its massive oil reserves and its already developed middle class and technical expertise. Once these resources and this talent are put to productive uses, instead of buying and manning weapons and palaces for Saddam Hussein, Iraq will not require the sorts of foreign assistance Afghanistan will continue to require for some time to come.''

White House Budget Director Mitch Daniels predicted Friday the reconstruction would be "successful and amply funded'' from a variety of sources."Iraq has all the elements to become a very successful country, or I should say, a very successful country once again,'' he said.

Iraq's economy is 20 times the size of Afghanistan's and the country has abundant resources to help in reconstruction, Daniels said.

The European Commission last week requested $79 million from its emergency budget reserve, bringing to $100 million the amount of money devoted to the impending humanitarian crisis in Iraq.

State Department officials said this week the United States is committing $21 million to the Office of the U.N. High Commissioner for Refugees, $60 million for the World Food Program and $10 million for the International Committee of the Red Cross.

The administration also requested $3.5 billion for humanitarian relief for Iraq in the $74.7 billion supplemental spending requests sent to Congress this week.

Last week the administration moved to confiscate Iraqi financial accounts that have been frozen since 1990 and to move them into a special account administered by the Federal Reserve. The Treasury reported Thursday the account already has $1.6 billion in seized assets available to help pay for reconstruction costs.

Despite the financial resources being drawn together, the long-term costs could be staggering.

An independent task force sponsored by the Council on Foreign Relations estimates that postwar stabilization and reconstruction could cost up to $20 billion a year for several years.

The task force report issued earlier this month estimated the stability and public security mission could require 75,000 to 200,000 or more troops in the early stages.

The Center for Strategic and International Studies, a Washington think tank, also found that gaps remain in the reconstruction plans, particularly for postwar security.

Roberta Cohen, a senior fellow for foreign policy studies at the Brookings Institution, said the administration's record in Afghanistan is not encouraging.

U.S. military have been concentrated around the capital of Kabul to protect the government while other parts of the country remain unsafe for international organizations to operate in and help in the rebuilding effort, she said.

"If Afghanistan is a model, I wouldn't want to repeat that in Iraq,'' Cohen said. "The U.S. has not fulfilled its promise. We have not secured a safe environment. Money promised to Afghanistan has largely not materialized.''